2nd round planned for Jobs Fund

The state is planning a second round for businesses to compete for funding through the 21st Century Jobs Fund, with the money this time going directly to companies that are creating jobs

Thirty million dollars would become available later this year - though, unlike last time, not to research universities and not-for-profit organizations that garnered a large chunk of the funding in the initial round.

"There are a lot of companies out there that really need money now," Epolito said. "We've got to retain these companies and strengthen the companies that are here."

A state panel that oversees the Jobs Fund, the Strategic Economic Investment and Commercialization Board, still needs to finalize details. A meeting scheduled this week in Lansing was canceled, and the board is to meet again March 12.

The MEDC hoped to issue requests for proposals for the next round of funding by late March and make decisions in August, Epolito said.

Designed to diversify the state's economy, the $2 billion, 10-year 21st Century Jobs Fund previously awarded $126.3 million for 78 projects, with the funding split among private companies, not-for-profit organizations and research universities.

Universities and not-for-profits combined got more than half the money last time, and some criticism arose that universities got too much of that funding. Epolito says that criticism did not play a role in formulating the next round.

The Right Place Inc. President Birgit Klohs agreed with the plan to steer the money this time only to private companies, and she welcomes the next round as a way to sustain the momentum from the initial funding.

"For Michigan to continue to invest is critical," Klohs said. "We need to continue to lead."

About $400 million of the Jobs Fund has already been spent or earmarked, Epolito said, including $109 invested in venture capital funds and $95 million to create the Venture Michigan Fund to provide capital to start-up and early-stage companies.

Another $12 million went to efforts to retain former Pfizer Inc. personnel and resources in Michigan, including $3.4 million to turn a former Pfizer facility in Holland into a bio research-and-development center.

The state is required to spend $75 million of the Jobs Fund annually.
Epolito, though, would like to see subsequent competitions beyond 2008.

"We hope in the coming years to seed more money in this direction," said Epolito, emphasizing the 21st Century Jobs Funds is a long-term strategy to reposition the state's economy.

"We have to think in terms of years and what we're going to do over the next decade," he said.

Gov. Jennifer Granholm, in an interview last week, said Michigan "has the most aggressive diversification strategy in the nation."

About three-quarters of the money in Jobs Fund's first round went to life sciences, which is one of four economic sectors targeted, along with advanced automotive manufacturing, alternative energy and homeland security.

Business Review posted a version of this story online at mlive.com/business at 8 a.m., Monday, Feb. 25.